The government shutdown has chilled economic activity across the board. What is it doing to the Boston housing market? And what can we predict for the future of the Boston real estate market? We will discuss the latest trends & prices and find out how they can affect the investors and homebuyers of Boston in the latter half of 2020. Severe limitations on property access had slowed the real estate market activity across metropolitan Boston in the past three months. However, the market has started to bounce back.
In June, the pending sales of single-family homes jumped 43.6 percent from 1,187 homes put under agreement in May, and condo pending sales climbed and even more impressive 51.7 percent from 782 units placed under agreement in May, according to GBAR. The Boston area does not have nearly enough homes for sale to meet the demand and that’s putting extreme upward pressure on prices. The lack of housing supply is evident in the inventory data for June. According to Realtor.com, in July 2020, the Boston market was a balanced real estate market, which means there was a healthy balance of buyers and sellers in the market.
Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Boston have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 100% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher. The median list price of homes in Boston, MA was $769K, trending up 2.7% year-over-year. The median listing price per square foot was $681. The median sale price was $679K.
Will The Boston Housing Market Collapse? — ATTOM did a study intended to identify the housing markets in the United States at the greatest risk of a real estate market collapse. They said the Northeast is the area most likely to be hard hit. They used factors like market affordability and the percentage of underwater homes. The Boston area was ranked as being at high risk but not as high of a risk as cities dependent on international trade or a local airport. This is due to Boston's diversified economic base. Furthermore, this makes the next twelve months a great time to buy in the Boston housing market, if you have the cash to do so.
More detailed “BOSTON HOUSING MARKET REPORT” is given below. Let’s discuss a bit about Boston and the metro area before discussing why you’d want to invest in its real estate market. Boston is a fairly walkable city in Suffolk County with a population of approximately 700,000 people, making the Boston housing market rather large on its own. It is a thriving city, which makes it the best location to buy an investment property at any point in time including the present.
Since it contains around 80% of all residents of Massachusetts, it is certainly the first place that people choose to research, when they want to invest in the state. The broader Boston Metropolitan Area or Greater Boston is home to more than four million people. Boston real estate has been one of the best long term real estate investments in the nation. The Boston real estate market is dominated by rental properties and Airbnb is a great pick for starters.
The city is a wonderful place to call home. People want to live in the city, yet the number of new homes being built is relatively low. Boston's real estate market is vibrant, and plenty of buyers are offering more than the asking price when they love a property. Throughout the Greater area of Boston, numerous investment properties are waiting to be revitalized by a wise investor. But for most people, Boston is a high-priced real estate market, though it isn’t as expensive as Washington DC, San Francisco, or New York City.
Greater Boston is still an expensive place to buy a house, but the years of relentless price increase may be nearing an end. It’s too soon to know if this trend is a blip or is the Boston housing market heading towards some stability. However, new investors should always consider cheaper markets for investment. Because of the large number of students, college and university faculty, it is a no brainer for savvy investors to invest in a rental property in Boston.
Rental property in Boston is guaranteed to get a lot of demand from tenants – whether an apartment or a condo or a single-family home. Any investment property is likely to get rented out fast. Airbnb rentals are one of the best options for real estate investment in Boston. Let’s find out more about it.
Boston Housing Market Trends & Prices 2020
We shall now discuss some of the most recent real estate trends & news in the Boston area and compare it with the past couple of years. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region. Boston has been one of the hottest real estate markets in the country for many years. It is not just an expensive real estate market on the East Coast. It is one of the few in the region not expected to see significant declines. And there are areas we can expect to see significant appreciation due to the sheer demand for affordable housing with easy access to major arteries or public transit.
There are several reasons to consider investing in the Boston real estate. Boston's real estate appreciation rate in the latest quarter was around 1.12%. However, it is quite unclear whether it would remain steady or not. Looking at the positive forecast, the annual appreciation rate is predicted to be between 4% to 5%.
Boston is currently a buyer's real estate market—which means that the demand from buyers is less than the current supply of homes for sale. The pricing of homes is trending lower and is more attractive for buyers in the current phase. The shortage of demand and an increase in the supply component for housing will push the prices down.
Before the COVID-19 pandemic hit the region—In 2019, the Boston housing market was the fourteenth most expensive real estate market in the United States. By March 2020, housing prices had doubled in just five years. Areas like Roxbury, Mission Hill, and Dorchester had more than 110 percent appreciation. That's because these historically affordable neighborhoods have been gentrifying.
On the other hand, zip codes like 02167 and 02108 hardly changed in value over the past five years. The 02199 zip code depreciated over the same five year period. These zip codes include Back Bay and Beacon Hill that essentially saw housing prices decline when you take inflation into account. That doesn't mean much once you know that 02199 was already the most expensive zip code in the Greater Boston Area.
In 2019, half a million dollars could buy you a 500 square foot condo in the North End or a 2,000 square foot single-family home in North Billerica. Before the coronavirus crisis and the government-mandated shutdown, the average home price was roughly 700,000 dollars. The average property sold for roughly 600 dollars per square foot.
Impact of COVID-19 on The Boston Housing Market
There’s no question that the Greater Boston housing market took a hit from the pandemic, but there is no indication of the start of a lasting market shift. Even with the pause in the market this spring, home values have not been severely impacted in a negative way, which is good news for home sellers.
Inventory is tight. In many cities, the available inventory of homes for sale has fallen by double digits. While mortgage rates are pushed lower by the recession caused by the economic shutdown, banks are managing their risk by requiring you to have near-perfect credit. This means there are fewer qualified buyers. And it means fewer buyers are chasing that limited inventory, so it isn't driving housing prices up.
A lot of people who want to move can't do so, because they've either been furloughed or are afraid of losing their jobs. Ironically, this is going to create a buying opportunity for those wanting to buy multi-family housing from distressed landlords. This is because of how many people aren't making their rent payments, while it is almost impossible to evict someone for non-payment.
Long-term, housing inventory will remain low. While building maintenance and construction are essential activities, the disruptions in the supply chain are causing delays. After all, it is hard to finish a house when you can't get sinks or new appliances. This is on top of the chronic lack of available land and the high cost of construction labor in Boston.
But what about housing prices in the Boston area? ATTOM did a study intended to identify the housing markets in the United States at the greatest risk of a real estate market collapse. They said the Northeast is the area most likely to be hard hit. They used factors like market affordability and the percentage of underwater homes.
The Boston area was ranked as being at high risk but not as high of a risk as cities dependent on international trade or a local airport. This is due to Boston's diversified economic base. Furthermore, this makes the next twelve months a great time to buy in the Boston housing market, if you have the cash to do so.
Sales of single-family homes and condominiums slumped in May from year-ago levels as a sharp reduction in property showings and depleted inventory levels quieted the spring housing market, according to data released by GBAR. The decline in sales on an annual basis was by -32.8 percent, falling from a record high of 1,323 homes sold a year ago (May 2019) to just 889.
Sales also slid on a month-to-month basis by 0.8 percent from 896 homes sold in April. This May’s sales total is the lowest for the month since 777 single-family homes were sold in May 2009, and it’s the largest year-over-year percentage decline in home sales since October 2019 when sales fell 38.7 percent from the prior October. Active listings fell by more than one third from a year ago, declining 35 percent from 3,355 homes for sale in May 2019 to 2,177 this May, which marks the lowest total of listings for May in over a decade.
The median selling price for single-family homes rose to a new record high of $670,000 last month, an increase of 5.5 percent from $635,000 in May 2019, and a 1.1 percent gain over the previous monthly record high median price of $662,500 set one month earlier in April.
The latest Boston Housing Market Report released by the “Greater Boston Association of REALTORS® (GBAR)” shows that inventory remained very tight in June as well. According to them, there is strong upward pressure on prices, particularly in the starter home and mid-priced single-family markets where the imbalance between supply and demand is most extreme.
Note: The data includes all 64 towns within the GBAR jurisdictional area.
| GREATER BOSTON HOUSING MARKET STATISTICS – JUNE 2020 |
| Sales of single-family homes declined on an annual basis by 28.8 percent in June, decreasing from 1,616 homes sold in |
| June 2019 to 1,150 last month. |
| It’s the lowest June sales total for single-family homes in nearly 25 years, though the volume is up nearly 30 percent from the previous month when 894 homes sold in May. |
| Condominium market sales fell 39.3 percent over the past year, from 1,253 condos sold last June to 760 units sold in June 2020. |
| The median selling price for single-family homes rose to a new record high of $679,075 last month, an increase of 4.5 percent from $650,000 in June 2019. |
| It was a 1.7 percent gain over the previous monthly record high median price of $667,500 set one month earlier in May. |
| In the condominium market, the median selling price remained relatively strong, decreasing 4.4 percent from a record high monthly median price of $619,900 last June to $592,500 in June 2020. |
| In the single-family home market, the number of active listings declined by at least one-third for a third consecutive month. |
| Active listing decreased by 32.5 percent from 3,259 homes for sale last June to just 2,200 homes on the market in June 2020. |
| Condo listings also were down from year-ago levels, but much more modestly so, sliding 2.1 percent from 2,564 units for sale in June 2019 to 2,511 this June. |
| Pending sales of single-family homes rose by 7.5 percent from 1,586 last June to 1,705 in June 2020. |
| Pending sales of condos inched up 0.3 percent from 1,183 condos put under agreement in June 2019 to 1,186 this June. |
HERE IS THE VISUAL REPRESENTATION OF THE HOUSING MARKET TRENDS For GREATER BOSTON, CITY OF BOSTON, AND METRO BOSTON. (Courtesy of GBAR.com)
Boston Real Estate Market Forecast 2020 – 2021
What are the Boston real estate market predictions for 2020? Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. Since 2012, the median home price in Boston has appreciated by a whopping 76.15% from $366,000 to $644,743.
The Zillow Buyer-Seller Index (BSI) shows that Boston is currently a cool buyer’s real estate market. This is computed monthly. According to their index, there exists a general lack of demand in Boston, and homes can linger on the market longer and ultimately sell for less, putting negotiating power in the hands of buyers. In other words, based on the last month’s key housing market indicators, current supply is exceeding the demand, giving buyers an advantage over sellers in price negotiations. There are more homes for sale than there are active buyers in the marketplace.
Boston's median home values have gone up by 2.4% over the past year and are currently holding at $644,743 (Zillow Home Value Index). The latest Boston real estate market forecast is that the home prices may fall by 1.7% – in the next twelve months. It may be perhaps due to COVID-10 that has led to a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. That's how the prices remain flat or drop.
Here is another short and crisp Boston housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of the Boston housing market trend prediction is 78%. LittleBigHomes.com estimates that the probability of rising home prices in Boston, MA is 78% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
The historical change in home prices for Boston MSA is shown below for the three-time periods. The Boston Home Price Index has increased for the last 25 consecutive quarters (data up to 3rd Quarter, 2018). The all-time high in the Boston Home Price Index was 310.7 in the 3rd Quarter, of 2018. The Home Price Index indicates that the Boston Market is up 30% over the last 10 years. Over the last thirty years, it is up 178%.
The highest growth in home values in the Boston Real Estate Market over three years was 91% in the three years ended with the 1st Quarter of 1987. The worst performance over three years in the Boston Market was -14% in the three years ended with the 3rd Quarter of 2009. For the upcoming updates, you can visit LittleBigHomes.com.
| Time Period | Boston Real Estate Appreciation |
| Last 5 Years | 33% |
| Last 10 Years | 30% |
| Last 20 Years | 153% |
The question now is what happens moving forward. These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is quite evident that the pandemic had a major impact on home sales in the Boston real estate market due to the sharp reduction in property showings. The depleted inventory levels slowed down the housing market in the spring season.
Sales of single-family homes dropped sharply in May (32.8%) & June (28.8%) from the previous year as the housing market began to feel the full impact of the coronavirus outbreak and the state’s stay-at-home order. In June, it was the lowest in nearly 25 years, though the volume is up nearly 30 percent from the previous month when 894 homes sold in May.
The pandemic, however, has not had much impact on prices yet. Historically low-interest rates, tight inventory, and strong demand are continuing to favor sellers in the Greater Boston housing market. The median selling price for single-family homes rose to a new all-time
a record high of $679,075 last month, an increase of 4.5 percent from $650,000 in June 2019. It also broke the record high median price of $667,500 set one month earlier in May.
In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Boston can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. The inventory level has dropped to critically low levels (1.9 months) due to a decrease in active listings.
Despite an increase in pending sales in June, active listings dropped by 32.5%. It is one of the factors that affect overall sales dollar volume while simultaneously creating a very competitive and tight market which keeps the home prices from plunging.
For buyers in the Boston housing market: It is a great opportunity to scoop up their favorite deals due to low mortgage rates. Historically low interest rates are a driver in the market response will continue to act as a driver despite the overall impact of the pandemic. The 30-year, fixed-mortgage interest rate averaged 3.16 percent in June, down from 3.80 percent in June 2019, according to Freddie Mac. The five-year, adjustable mortgage interest rate was an average of 3.09 percent, compared to 3.48 percent in June 2019.
We can expect soft demand for housing for the remainder of 2020 and probably a weak housing market into the first quarter of 2021. This is why Zillow was predicting a 1.7 percent decline in real estate prices over the next year after a relatively mild 2.4 percent appreciation in 2020. There is the possibility that home prices will fall farther. However, the demand for housing isn't going to change unless there is a liquidity crisis.
We may see the markings of this with the Fed offering up to a year of mortgage forbearance to make up for shutting down large sections of the economy. While this gives homeowners some relief in the short-term, it also prevents this revenue from flowing to mortgage holders. If they don't receive mortgage payments, they may become unable to extend additional mortgages.
Or they may require a federal bailout as we saw during the 2007-2008 financial crisis. That would slow down the housing market recovery. It could also cause housing prices to fall more than the predicted 2 to 4 percent in most markets, due to a sheer lack of qualified buyers. The opportunities for real estate investors will grow with every month the economy is shut down in part or in full.
After all, landlords still have to pay for maintenance, insurance, and property taxes. They're facing additional bills as they sterilize common areas, though many tenants are not paying the rent in full or at all. Being forced to let them amortize the missed rent over the next six months or hoping they pay later doesn't help pay the bills due today.
It will be well into 2021 before you will see a spike in single-family and condo foreclosures. First, mortgage forbearance must end. Then the backlog of prior foreclosure and eviction cases must be cleared before a wave of new ones can be processed. This creates an incredible buying opportunity in the Boston housing market if you can secure funding or have the cash to start buying once this inventory hits the market.
A secondary effect of the government-mandated shutdown will be major growth in the renter population since the economy is expected to be slow to recover. People who lost their small businesses won't be able to recover overnight. They'll have to rebuild after they've liquidated a closed business and find a job with which to pay the bills.
Let's assume we don't face the worst-case scenario but don't see a rapid V-shaped recovery. Home prices either remain flat or fall by a modest amount. Corelogic forecasts home prices falling 6 to 7 percent by mid-2021. Haus has a more modest prediction, suggesting that home prices will fall 0.5 to 2.5 percent by mid-2021.
The degree to which it declines depends on how fast the job market recovers. However, policies like the payments under the CARES act and policies intended to stall foreclosures prevent the housing market from being flooded with properties when there are almost no buyers. And that's what caused housing prices to fall by as much as 50 percent during the Obama-era Great Recession.
Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Boston in 2020 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance.
Here is a snapshot that shows the median home values in some of the popular neighborhoods of Boston.
Boston Real Estate Investment: Top Reasons To Invest
Successfully investing in real estate — whether you are in Boston or anywhere else in the world — is all about correctly timing the market. Knowing when to enter into the real estate market can often be a bit of a challenge. Should you invest in Boston real estate? Is Boston a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Boston is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2021.
Boston is an old, East Coast city. We’ve already mentioned the height law and the challenges faced by getting anything approved even with the mayor behind it. Unfortunately, Boston’s entrenched bureaucracy limits the redevelopment of large garages and other major projects that could bring thousands of units to the Boston real estate market.
If it takes ten years (or more) for the Boston Harbor Garage to be redeveloped, and it is far from the only project on hold, then you can be certain to see high returns on any redevelopment project that creates more housing units within existing buildings. Whether this is converting warehouses into lofts or single-family homes into multi-family housing, if you don’t face major roadblocks, you’ll see a great return on the investment.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Boston real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Boston that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.
Investing in Boston real estate will fetch you good returns in the long term as the home prices in Boston have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Boston real estate market which can help investors who are keen to buy an investment property in this city.
Boston is Attractive to Millennials
Millennials are a market real estate agents want to cater to since they’re buying homes in mass. And Boston is considered one of the cities Millennials love. The challenge for Millennials is affording a market where the median home costs around $740,000. Yet the demand from young and old alike means there’s very little inventory, much less housing stock considered affordable. Boston isn’t just attracting young people from across the country – it is also attracting immigrations from around the world. The city has seen population growth every year since 2004 in part because of the influx of immigrants attracted to healthcare, biotech, and educational jobs here.
Millennials and older adults alike are choosing to spend more on an apartment, condo, or house to avoid spending hours each week commuting. It is seen as an investment in their quality of life. This explains why downtown Boston is seeing price increases far higher than the rest of the Boston metro area. Downtown enclaves sell for much more per square foot than properties at the edge of town or in the suburbs; the price hit a thousand dollars a square foot recently. That’s expensive for the U.S. but half the price you’d pay for a comparable apartment in New York City. Ironically, the high price of real estate in NYC explains why many financial firms are expanding in the relatively cheaper city of Boston, home of the mutual fund.
Boston's Job Market Will Keep People Coming
Boston was ranked the best city in the U.S. for startups. A large number of world-class universities provide a large number of skilled workers, many of whom work in medicine, finance, and biotech. The constant creation of new jobs will continue to attract residents and help the city retain the ones it already has. The economy is dominated by services, which usually pay high wages and attract more and more job seekers. All these factors have created a hot housing market in Boston, dictated by both home buyers and tenants.
Guaranteed Real Estate Appreciation
Strong demand plus limited inventory and limited space to grow will guarantee appreciation of any property you buy in the Boston real estate market. While 2020 will see home prices across the country increase between 2% and 6%, Boston will be at the upper end of that range. This is only a continuation of the steady property increases seen since the 2008 property crash. This is partly because the market is so built-up already that land prices are high.
Then there’s the fact it can take a long time to get approval to build up. Boston’s mayor is facing flak for wanting to waive the building height rule just once. Ironically, the Boston shadow law that limits the height of buildings in the Boston housing market has the greatest impact on the downtown areas where people most want to see a tall apartment and condo towers built.
The increase in mortgage interest rates is putting pressure on home buyers, limiting what they can afford. This in turn is leading to home builders to cut prices on new properties. According to the Washington Post, Boston home builders are cutting the price of properties on the market by 6%. If you have financing or the cash to invest in the Boston real estate market, you can’t pass up a deal like this.
Boston Rental Market is Booming
The Boston real estate market and its environs include a whopping hundred universities, colleges, and trade schools. There are more than 150,000 college students in Boston and Cambridge alone. You could buy properties across the Boston real estate market and cater to students, and your market is so diverse that you’ll always see demand. Boston is landlord friendly compared to markets like NYC. There is no limit on late fees.
You don’t have to provide notice before entering the apartment. The state doesn’t require rental licenses to become a landlord. There aren’t laws regarding re-keying or pets. A written rental agreement is only mandatory if your tenant is staying for more than 12 months. Evictions are allowed if they are not paying the rent, violating the lease, or breaking the law. You can start evictions two weeks after the non-payment of rent. Since evictions can take weeks, screen tenants well for any property in the Boston housing market.
Rents in the inner Boston Core hit 2800 a month. All those grad students, young single professionals, and highly paid power couples are bidding up the limited housing stock available. If you can find a reasonably affordable property in the Boston real estate market and convert it into multiple units or a more upscale clientele, you’ll enjoy significant cash flow from the property. Any future real estate investor in Boston should also have in mind that the expected rental income for both traditional rentals and Airbnb rentals is high.
The combined effect of high property prices and high rental income leads to a decent return on investment for Boston rental properties. The taxes here are high compared to the U.S. average but lower than several other states in the area. The income tax rate is much lower than in New York, and property taxes are far lower than in New Jersey. Therefore, you’ll clear more here than some of the other large Northeast markets.
Luckily for real estate investors in Boston who are interested in Airbnb rentals, they are fully legal in the Boston real estate market and are not even taxed at the moment. Recent discussions among Massachusetts lawmakers failed to result in an agreement on taxes to be charged on short-term rentals.
Latest Rental Market Statistics: The average rent for an apartment is $3,432, a 3% increase compared to the previous year. According to RENTCafe, 51% of the households in Boston are renter-occupied, which is a significant population. More than 95% of the apartments fall in the range of $2,000 or more, which shows how high are the rents in Boston. As a rental property investor, it should be on your list of due diligence. Do the math and find out the best neighborhood & property that suits your investment goals.
The average size for a Boston, MA apartment is 812 square feet with studio apartments are the smallest and most affordable. 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.
These are some of the most affordable neighborhoods where the rent prices are below the Boston average rent:
- Mattapan, where the average rent goes for $1,937/month.
- South Dorchester, where renters pay $2,147/mo on average.
- West Roxbury, where the average rent goes for $2,148/mo.
- Allston-Brighton, where renters pay $2,436/mo on average.
- Roslindale, where the average rent goes for $2,452/month.
- Roxbury, where the average rent goes for $2,531/month.
According to RentJungle, as of July 2020, the average rent for an apartment in Boston, MA is $2910 which is a 6.6% decrease from last year when the average rent was $3102, and a 3.57% decrease from last month when the average rent was $3014.
- One-bedroom apartments in Boston rent for $2618 a month on average (a 4.47% decrease from last year).
- Two-bedroom apartment rents average $3263 (a 7.26% decrease from last year).
- The average apartment rent over the prior 6 months in Boston has decreased by $269 (-8.5%).
- One-bedroom units have decreased by $180 (-6.4%).
- Two-bedroom apartments have decreased by $209 (-6%).
Boston Investment Properties: Where To Buy?
In any real estate investment, cash flow is gold. Boston is the top market where real estate investments are safe and have high rates of return. The Boston housing market sees steady population growth, faces limited supply, and can’t go vertical. This means that those who invest in the Boston real estate market will see decent cash flow from nearly any property and guaranteed appreciation. Allston is an excellent neighborhood to buy an investment property in Boston as the median property price is well below the city level. Airbnb rentals are the best option for real estate investing in Boston.
Good cash flow from Boston investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Boston in a growing neighborhood would be key to your success. As with any real estate purchase, act wisely. Evaluate the specifics of the Boston housing market at the time you intend to purchase. When looking for the best real estate investments in Boston, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.
There are 59 neighborhoods in Boston. Back Bay has a median listing price of $1.4M, making it the most expensive neighborhood. Commonwealth is the most affordable neighborhood, with a median listing price of $467K. Some of the popular neighborhoods in Boston are Cambridge, Medford, East Boston, West Roxbury, Allston, Dedham, South End, Dorchester, Jamaica Plain, Roslindale, South Boston, Charlestown, Braintree, North End, and Hyde Park.
The best neighborhoods in the Greater Boston area for real estate investment are relatively affordable. They will offer a good rate of appreciation because of the influx of people moving there for affordable housing. They'll offer strong and rising rents in 2020 and beyond.
Roxbury has seen roughly 125 percent inflation over the past five years, a full 25 percent more price inflation than Boston as a whole. This is because Roxbury remains a relatively affordable area attracting people who are being priced out of rapidly gentrifying Boston. Affordable housing isn't the only reason why we can expect people to move here. For example, Benjamin Franklin Institute of Technology is considering moving to an available site here.
Northeastern University is considering building student housing here, as well. When Blue Hill Avenue is upgraded, the area will have better bus service connecting it to the rest of Boston. Furthermore, Roxbury is slated for rapid development. For example, there are several opportunity zones here. The biggest ones are near Ruggles and Roxbury Crossing. Note that the same trends are driving up rents and property values in Jamaica Plain and Dorchester, though we predict the greatest gains near the Nubian Square developments.
East Boston was once a cheap neighborhood because it was so close to the airport and factories. East Boston is in the middle of a building boom, as the old industrial waterfront gains office buildings and codon towers. Yet it has room for massive expansion thanks to the potential at Suffolk Downs. This will create an explosion of new development, though demand for these properties will be weak for the next few months. This influx of new development is why the area has seen only 105 percent appreciation over the past 5 years. These properties would be right off the Blue Line. Expect property values to skyrocket once there is regular public transit in the area.
East Boston is in sharp contrast to the slowly gentrifying South End, as young white professionals move into the area, driving up rents and property prices until they move somewhere else. But it is attracting people who snap up 800 square foot condos that may yet cost less than half a million dollars. Others snap up the new luxury apartments at Jeffries Point, because of its views of downtown Boston. Note that the area is connected to mainland Boston through the Sumner Tunnel.
Fort Point is a Seaport neighborhood. However, it is in the process of becoming a life sciences hub. Construction could turn the mostly vacated General Electric headquarters building into a life sciences campus. GE has moved its headquarters into one of the remaining buildings. A former Proctor and Gamble Building is going to become another life sciences building. Expect rents in the area to rise along with the increasing average income in the area. Furthermore, the area is going to gentrify as new mixed-use projects that were recently approved are built. They won't just be on the waterfront anymore. They'll have several new parks, as well.
Here are the ten neighborhoods in Boston having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
- Chelsea St / Meridian St
- Barnes Ave / Benner St
- Terminal D / Terminal E
- Jeffries Point
- Border St / Central Sq
- Bremen St / Marion St
- William F Mcclellan Hwy / Addison St
- Mckay Pl / Maverick St
- Blue Hill Ave / Maywood St
- Border St / Condor St
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Boston.
Consult with one of the investment counselors who can help build you a custom portfolio of Boston investment properties. Depending upon the availability, we can help you to find “Cash-Flow Rental Properties” located in some of the best neighborhoods of Boston.
Not just limited to Boston or Massachusetts but you can also invest in some of the hottest real estate markets for rental properties in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Boston turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Is It The Right Time To Invest In Real Estate? – The national homeownership rate is on the decline for the first time since 2017. As demographics change and baby boomers retire, you’re seeing Millennials who may not be ready to buy houses. In 2018, Millennials made up about 22 percent of the population in the United States. They’re choosing to rent over buying a single-family home or an apartment. Rising home prices and shortage of starter homes have not left Millennials many choices but to delay homeownership. Moreover, it's even harder to take out a mortgage for those who have student loan debt.
Apart from the Boston real estate market, you can also invest in Jersey, City. The Jersey City housing market is seeing significant growth because it is close to New York City but isn’t NYC. It has several points in its favor, too, like a good job market and local amenities. Renters and buyers alike are taking notice and helping to make Jersey City the fastest-growing metropolitan area in the state. Jersey City has been busy redeveloping old neighborhoods, encouraging a mix of new retail, luxury housing, and affordable housing.
Jersey City is notable for the major redevelopment on the waterfront, known as the Shore, while properties there enjoy a great view of Manhattan. Jersey City takes things one step further and is setting up a “Friendly Building Program”, where developers build entire buildings where renting through AirBnB is allowed. This is an innovative development in the Jersey City housing market.
Let us know which real estate markets in the United States you consider best for real estate investing!
Please do not make any real estate or financial decisions based solely on the information found within this article. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Boston real estate. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.
References:
Market Data, Reports & Forecasts
https://www.gbreb.com/
https://www.gbreb.com/GBAR/Housing-Market-Data/
https://www.zillow.com/boston-ma/home-values
https://www.realtor.com/realestateandhomes-search/Boston_MA/overview
https://boston.curbed.com/boston-market-reports
https://www.bostonmagazine.com/property/2018/01/24/boston-zillow-housing-crisis
Pre-COVID stats
https://www.bostonmagazine.com/property/2019/01/31/expensive-housing-market/
https://www.bostonmagazine.com/property/2020/03/16/boston-home-prices-doubled/
https://www.redfin.com/city/1826/MA/Boston/housing-market
Landlord friendly & Rental Statistics
https://www.avail.co/education/laws/massachusetts-landlord-tenant-law
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters
https://www.rentjungle.com/average-rent-in-boston-rent-trends/
https://www.rentcafe.com/average-rent-market-trends/us/ma/boston/
Reasons to Invest
https://nextcity.org/daily/entry/boston-mayor-waive-building-height-rule-park
https://www.fool.com/taxes/2017/10/09/7-states-with-the-highest-income-tax.aspx
https://www.bostonmagazine.com/property/2018/05/30/boston-renting-crisis
http://charlesgaterealty.com/2018/11/29/boston-strong-the-fast-growing-boston-housing-market
https://www.forbes.com/sites/ellenparis/2018/01/29/2018s-housing-market-looks-good-unless-youre-a-first-time-millennial-buyer/#78138a011885
Bureaucracy
https://boston.curbed.com/boston-development/2018/2/22/17037854/boston-building-height-limit
The Best Neighborhoods for Boston Real Estate Investment
https://www.bostonmagazine.com/property/2020/03/16/boston-home-prices-doubled/
https://boston.curbed.com/boston-development/2020/1/7/21051943/boston-neighborhoods-to-watch
https://www.boston.com/news/local-news-2/2020/07/09/boston-ranked-third-most-gentrified-city
https://www.bostonglobe.com/2020/07/27/business/plans-major-project-along-fort-point-channel-are-moving-ahead/
